Low-end motherboard maker ASRock announced it will start making mid-range and high-end motherboards next year. The firm expects these products will account for about 35-40 percent of their shipments next year:
With the entry-level CPU market shrinking to only 20% in 2007, if ASRock continues to focus only on the entry-level motherboard market, the company's profits will only continue to decline, Hsu pointed out.
Although ASRock will cut into mid-range and high-end markets, the company's relationship with Asustek Computer will not be directly impacted, Hsu claimed.
However, adjusting the proportion of motherboards does not mean shipments will decline, noted Sterling Wu, president of ASRock. Overall shipments will continue growing with the company focusing in the retail channel, while outsourcing to Hong Kong-based Fittec Electronics will help relieve factory operation costs during slow seasons. ASRock will also lower costs by joint ordering Asustek. In all, the company's ability to gain profit will not be weakened with the strategy change, Wu attested.
Although previous reports indicated ASRock was planning new product lines, Wu said the company currently has no such plans. Additionally, an earlier plan to enter the graphics cards market has been suspended due to fierce competition in the market.